In Lorain, Ohio, nine-year-old Claudia MacTeer and her 10-year-old sister Frieda live with their parents, a tenant named Mr. Henry, and Pecola Breedlove, a temporary foster child whose house was burned down by her unstable, alcoholic, and sexually abusive father. Pecola is a quiet, passive young girl who grows up with little money and whose parents are constantly fighting, both verbally and physically. Pecola is continually reminded of what an "ugly" girl she is by members of her neighborhood and school community. In an attempt to beautify herself, Pecola wishes for blue eyes – a standard that was perpetuated through the gifting of white, blue-eyed dolls throughout her childhood. Additionally, most chapters' titles are extracts from the Dick and Jane paragraph in the novel's prologue, presenting a white family that may be contrasted with Pecola's. The chapter titles contain sudden repetition of words or phrases, many cut-off words, and no interword separations.
The novel, through flashbacks, explores the younger years of both of Pecola's parents, Cholly and Pauline, and their struggles as African Americans in a largely White Anglo-Saxon Protestant community. Pauline now works as a servant for a wealthier white family. One day in the novel's present time, while Pecola is doing dishes, drunk Cholly rapes her. His motives are largely confusing, seemingly a combination of both love and hate. After raping her a second time, he flees, leaving her pregnant.
Claudia and Frieda are the only two in the community that hope for Pecola's child to survive in the coming months. Consequently, they give up the money they had been saving to buy a bicycle, instead planting marigold seeds with the superstitious belief that if the flowers bloom, Pecola's baby will survive. The marigolds never bloom, and Pecola's child, who is born prematurely, dies. In the aftermath, a dialogue is presented between two sides of Pecola's own deluded imagination, in which she indicates conflicting feelings about her rape by her father. In this internal conversation, Pecola speaks as though her wish for blue eyes has been granted, and believes that the changed behavior of those around her is due to her new eyes, rather than the news of her rape or her increasingly strange behavior.
Claudia, as narrator a final time, describes the recent phenomenon of Pecola's insanity and suggests that Cholly (who has since died) may have shown Pecola the only love he could by raping her. Claudia laments on her belief that the whole community, herself included, have used Pecola as a scapegoat to make themselves feel prettier and happier.